Question: The manager at Michael's Furniture Store is trying to figure out how much to charge for a sofa that just arrived. If the sofa was bought at a wholesale price of $138.00 and Michael's Furniture Store marks up all furniture by 60%, at what price should the manager sell the sofa?
Solution: In order to find the retail price, we must first find the amount of markup. Remember that a markup rate is a percentage of the wholesale price that a store adds to get a selling or retail price. With this knowledge, we can figure out the following equation: markup rate $\times$ wholesale price $=$ amount of markup Since the markup rate is a percentage, we have to convert it into a decimal first. Percent means "out of one hundred," so $60\%$ is equivalent to $\frac{60}{100}$ which is also equal to $60 \div 100$ $60 \div 100 = 0.60$ Now you have all the information you need to find the amount of markup! $0.60$ $\times$ $$138.00$ $=$ $$82.80$ Since the markup rate is a percentage of the wholesale price that is added to get the retail price, we can find the retail price with the following equation: amount of markup $+$ wholesale price $=$ retail price $$82.80$ $+$ $$138.00$ $=$ $$220.80$ The retail price of the sofa should be $$220.80$.